The Japanese navy was engaged in a massive expansion program, and at the time, many major items (such as advanced warships and weaponry) were still being imported from Europe. Siemens had secured a virtual monopoly over Japanese naval contracts in return for a secret 15% kickback to the Japanese naval authorities responsible for procurement.

In 1914, the British firm of Vickers (via their Japanese agents Mitsui Bussan) offered the Japanese naval authorities a more lucrative deal, involving a 25% kickback, with 40,000 Yen for Vice AdmiralMatsumoto Yawara, the former Chief of the Navy Technical Department, specifically involving the procurement of the battlecruiserKongō. When the German headquarters of Siemens found out about the deal, they sent a telegram to their Tokyo office demanding a clarification. An expatriate employee of the Siemens Tokyo office (Karl Richter) stole incriminating documents indicating that Siemens had previously paid a bribe of 1,000 pounds sterling to the Japanese navy in return for a wireless contract, sold the...Read More